(The complete series of AAAS R&D Funding Updates,
including continually updated analyses of R&D by agency in FY 2000
appropriations, is available on the AAAS R&D Web Site (http://www.aaas.org/spp/R&D)
in the "FY 2000 R&D" or the "What's
New" sections.)
On October 27, Congress finally reached agreement on
a House-Senate conference report for the FY 2000 Labor-HHS appropriations
bill providing funding for the Departments of Labor, Health and Human
Services, and Education. In order to keep FY 2000 spending from dipping
into a projected Social Security surplus, the bill imposes a 0.97
percent across-the-board cut on all FY 2000 discretionary spending,
and employs numerous accounting tricks to shift spending to FY 2001.
Despite tight restrictions on total spending, the Labor-HHS bill demonstrates
strong congressional support for biomedical research by providing $17.7
billion in FY 2000 for the National Institutes of Health (NIH), an increase
of $2.1 billion or 13.6 percent over FY 1999 (after adjusting for
the across-the-board cut; see Table 1).
However, $7.5 billion is withheld until September 29, 2000, a
day before the end of FY 2000, in order to shift spending to FY 2001.
The FY 2000 budget process is still underway although
FY 2000 is already a month old, and a major reason for the delay is
the Labor-HHS bill. The House and Senate drafted separate versions of
the bill in late September, the last of the 13 appropriations bill to
be drafted, but the House never approved its version. The House leadership
chose to take the bill directly to conference, and attached the conference
report to the DC appropriations bill, which had gone through the usual
process. Much of the delay was because Congress has publicly committed
itself to spending no more than $592 billion (in outlays) in discretionary
spending in FY 2000 in order to avoid dipping into the projected Social
Security surplus for FY 2000. Although this target is less restrictive
than the previously abandoned goal of keeping spending within discretionary
caps, this pledge still required Congress to cut discretionary spending
well below FY 1999 levels. The result was a protracted scramble to find
politically acceptable cuts in discretionary programs, find accounting
tricks to disguise spending, or find suitable offsets to pay for additional
spending.
In order to meet the pledge, the appropriations bills
have been padded with numerous accounting tricks. The Labor-HHS bill
contains billions of dollars in advance appropriations. While
advance funding (in this case, providing FY 2001 appropriations a year
early) has traditionally been used for several programs, notably education
programs, advance funding has rarely exceeded $4 billion a year in the
past. Last year, however, faced with tight budget caps, Congress provided
$9 billion in advance appropriations in the Labor-HHS bill, pushing
that funding to FY 2000. Because of the even-tighter caps in FY 2000
with $9 billion already spent, this year's Congress in a chain reaction
has shifted FY 2000 funds to FY 2001 but upped the ante. The final Labor-HHS
bill claims an unprecedented $19 billion in FY 2001 funds for the Labor-HHS
bill's programs.
Still facing a shortfall, Congress resorted to other
creative but controversial tactics, including the proposed across-the-board
cut of 0.97 percent cut for all FY 2000 appropriations, including
agencies (such as the National Science Foundation (NSF) and the Department
of Defense) whose appropriations have already been signed into law.
The bill also proposes offsets through improved student loan collections,
and delays the release of billions of dollars in FY 2000 funds until
September 29, 2000, two days before the start of FY 2001, in order to
minimize FY 2000 outlays.
The House and the Senate both proposed substantial
increases for R&D funding in the National Institutes of Health (NIH).
The House proposed $16.9 billion for NIH in FY 2000, $1.3 billion or
8.5 percent above the FY 1999 funding level (see the September
30 R&D Funding Update for details of House and Senate proposed
appropriations for NIH). The Senate would have been even more generous
with an appropriation of $17.6 billion, exactly $2 billion above the
FY 1999 level for an increase of 12.8 percent. Both these appropriations
were well above the President's request of $15.9 billion, which would
have represented an increase of 2.1 percent. The Senate-proposed increase
would have kept pace with a $2 billion increase awarded in FY 1999,
and would have kept NIH nearly on track to double its NIH budget in
five years.
The final Labor-HHS bill follows the higher Senate
appropriation but adds even more money, for a total of $17.7 billion
for NIH's budget (after factoring in the across-the-board cut),
$2.1 billion or 13.6 percent more than FY 1999 (see Table
1). Excluding research training and overhead costs, NIH's R&D
totals $17.0 billion, 13.7 percent more than FY 1999. The generous appropriation,
however, comes with a bizarre catch. The final bill delays the release
of $7.5 billion of NIH's FY 2000 budget until September 29, 2000,
one day before the end of FY 2000. The bill does not specify how this
total should be distributed among the institutes, but it amounts to
42 percent of the total appropriation. This budgeting trick allows Congress
to appropriate a generous increase to NIH, but ensures that much of
it will not actually be spent in FY 2000, helping to hold down federal
spending in FY 2000 and thus keep the government from dipping into the
Social Security surplus. The money will become available on September
29, but NIH will not be allowed to obligate it until that date; that
is, NIH will not be able to award any grants or make commitments on
how to spend the money until the end of the year. Because it will take
NIH weeks to months to then disperse these funds, this money will not
be spent until FY 2001.
For all practical purposes, then, the Labor-HHS bill
forces NIH to operate for nearly all of FY 2000 on just two-thirds of
its FY 1999 budget. The $2.1 billion increase would be canceled out
by the withheld $7.5 billion in funds, leaving just $10.2 billion
for the first 364 days of FY 2000 compared to $15.9 billion for FY 1999.
Every institute (except the Office of the Director)
receives an increase greater than 12 percent in the final bill (including
the withheld funds), and five receive increases greater than 20 percent.
The bill provides $89 million for the National Institute of Nursing
Research (NINR), an increase of 27.6 percent; the Fogarty International
Center (FIC), the unit of NIH with the smallest budget, receives $43
million, up 22.2 percent; the National Center for Research Resources
(NCRR) receives $674 million, an increase of 21.4 percent, including
$75 million for extramural facilities construction; and a 26.1 percent
increase to the National Human Genome Research Institute (NHGRI) for
a total of $334 million. NHGRI is on schedule to publish a "working
draft" sequence of the human genome in spring 2000 and the complete
sequence by 2003. The largest percentage increase goes to the newest
institute, the National Center for Complementary and Alternative Medicine
(NCCAM), which receives $68 million for its second year of existence,
a substantial increase of $18 million or 36.2 percent. These appropriations
are similar to the Senate-proposed levels, and all are well above the
request.
The National Cancer Institute (NCI) once again has
the largest budget with $3.3 billion, an increase of 12.7 percent or
$373 million. By comparison, the entire NSF R&D budget is less than
$3 billion. The National Heart, Lung, and Blood Institute (NHLBI) exceeds
$2 billion for the first time with an appropriation of $2.0 billion,
12.6 percent more than FY 1999.
In addition to the regular NIH appropriation, there
are additional funds from an account in the Office of the HHS (Health
and Human Services) Secretary (see Table 2).
The bill approves a transfer of $20 million from the Public Health and
Social Services Fund to NIH. The $20 million funds a new program providing
matching funds for cooperative R&D between NIH and the biotechnology,
pharmaceutical, and medical device industries. The funds are planned
to go toward R&D activities in biomedical research and biotechnology
with commercial potential or promising therapies, and would become available
if industry matched the federal funds.
Both the House and the Senate appropriated NIH HIV/AIDS
research funds within individual institute budgets, instead of in
a consolidated account as the Administration proposed, and the final
bill retains this structure. Total NIH AIDS research is expected to
be well over $2 billion.
Although the Senate bill originally contained a provision
that would have allowed federal financing of research using stem
cells, the provision was removed before the bill reached the Senate
floor, and was left out of the final bill also. The provision would
have reflected recent recommendations from the National Bioethics Advisory
Commission, which recommended that NIH should finance research on stem
cells derived from embryos if these embryos are left-over embryos created
during fertility treatments that would otherwise have been destroyed.
The final Labor-HHS bill retains a ban on NIH using its funds to create
human embryos for research purposes or to perform any research
in which human embryos are destroyed.
The Labor-HHS bill provides increases for R&D programs
in other agencies within the Department of Health and Human Services
(HHS; see Table 2). R&D in the Centers
for Disease Control and Prevention increases by 6.2 percent to $473
million, with an additional $49 million provided by transfer from the
Office of the Secretary for bioterrorism-related R&D activities.
Congress boosts R&D in the Health Care Financing Administration
(HCFA) by $9 million to $59 million. HCFA finances R&D on health-care
outcomes and alternative health-care delivery systems in Medicare and
Medicaid. R&D in the Health Resources and Services Administration
(HRSA) increases dramatically to $50 million because of a large increase
in funding for rural health research. Total HHS R&D rises 14.0 percent
to $17.9 billion.
Although other R&D funding agencies have struggled
to maintain their budgets in the past several years, NIH has enjoyed
extraordinary success on Capitol Hill and its budget growth is accelerating
even as discretionary budgets get tighter. As shown in Figure 1, NIH
has enjoyed steady growth in its R&D budget over the past two decades,
and in many years Congress has awarded more than the request. NIH's
budget growth has accelerated in the last few years, and in the most
recent two years NIH has won increases of $2 billion, far more than
the Clinton Administration had requested. These increases are intended
as the first and second installments of a plan to double the budget
in five years.
NIH's growth has been good for the life sciences, for
which NIH is by far the largest federal supporter. Federal support for
life sciences has expanded dramatically over the past few decades, while
support for other disciplines, which rely on agencies other than NIH,
has stayed constant or declined. NIH now accounts for nearly two-thirds
of all federal support for R&D in colleges and universities, and
in FY 2000 NIH, for the first time, will fund more than half of all
federal support for basic research.
The combined DC/Labor-HHS conference report is expected
to win final approval from both the House and Senate this week, but
President Clinton has threatened to veto it because its education spending
falls short of his request in several priority programs, and because
of his unhappiness with the across-the-board cut. If it is vetoed, the
Labor-HHS bill may need to be rolled into a last-minute omnibus appropriations
bill covering all unfinished appropriations bills, as it has for the
past four years. Congress has approved another continuing resolution
providing temporary funding at FY 1999 funding levels until November
5 for programs in unsigned appropriations bills, to give Congress and
the President another week to reach final agreement on FY 2000 appropriations.
If additional funding for the President's priorities is to be found,
other programs may need to be cut back, or the across-the-board cut
may need to be increased.
- October 28, 1999
AAAS R&D Budget and Policy Program
American Association for the Advancement of Science
1200 New York Ave, NW
Washington, DC 20005
(202) 326-6607
science_policy@aaas.org
http://www.aaas.org/spp/R&D
